Three chicken producers that control 90 percent of the market are accused of price-fixing—again
Through most of the fall and winter of 2016 and 2017, we covered the spate of allegations (and class-actions) being leveled against some of the nation’s largest poultry producers by distributors who accused them of conspiring to “fix, raise, maintain, and stabilize the price of Broilers,” at least as early as 2008.
What that means in less litigious language is that the American public may not have been paying fair prices on our most ubiquitous protein source for the last couple of years.
For at least one of the producers named in the September, 2016 antitrust lawsuit filed in Illinois federal court, Tyson Foods, Inc.—also the country’s largest—October of 2016 was a really bad month. The company’s stocks took a big tumble after an analyst said publicly that he found the price collusion allegations “convincing.” Tyson’s fellow defendants, Pilgrim’s Pride and Sanderson Farms, fared only slightly less badly that fall. (In July, an Arkansas judge dismissed proposed class actions from Tyson’s investors, who claimed that the company’s ongoing price-fixing suit undermined profits.)
Tyson CEO Tom Hayes, meanwhile, has ardently defended the company, telling CNBC that the allegations are “baseless” and that he looks forward to “defending the company in court.”
And court may just be where he spends much of 2018. Last week, retail chains Winn-Dixie Stores and Bi-Lo Holding filed a second suit in U.S. District Court in Chicago against Tyson, Koch Foods, and Perdue Farms, alleging a price-fixing conspiracy. The suit comes after a federal judge in November refused to dismiss the 2016 class-action.
As the Chicago Tribune reported on Tuesday, the three producers named in this most recent suit control around 90 percent of the $30 billion broiler market. And after nearly a decade’s worth of alleged production cuts—one of the primary accusations said that producers had colluded in part by destroying their own hens and eggs to impede production—American retailers saw a “roughly 50 percent increase in the price of broiler chickens—the most popular kind of chicken meat in the country.”